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Compounding Your Interest: How To Increase Your Saving’s Return
One of the most pervasive answers I hear about why people aren’t saving more, is that savings “just sit there.” They don’t do anything. With the many classes and the lectures I do, it never ceases to amaze me when I hear that.
And while other excuses run the gamut from the high cost of living to sheer apathy – the fact is, most Americans don’t really understand saving. Many believe that it’s just too risky to put your money in the market right now. On the other hand, if it’s in a CD, money market or savings account their money…
17Mar2009 | Investment U | 0 comments | ContinuedRushing Toward Zero
“The Incredible Shrinking Interest Rate!”
Well, you’ve probably heard about the Fed slashing its key interest rate by 0.75% to historic lows, with the federal funds rate (the interest banks charge each other on overnight loans) now hovering between 0.25% and zero.
The prime lending rate used to peg rates on home equity loans, certain credit cards and other consumer loans should move lower, which could help you as a consumer if you’re a borrower. However, a 30-year fixed rate mortgage is still 5.53%, a car loan more than 6%, a home equity loan more than 8% and credit interest rates more…
19Dec2008 | Oxbury Research | 0 comments | ContinuedFed Slashes Interest Rates to a 0.0% to 0.25% Target Range … But Now What?
As expected, U.S. Federal Reserve policymakers slashed a benchmark interest rate yesterday (Tuesday). But they cut it by a bigger-than-expected amount, and did so in an unconventional manner.
Instead of establishing a new, specific primary interest rate, the central bank’s Federal Open Market Committee (FOMC) voted for a target range – 0.0% to 0.25% – a record low. Before yesterday’s cut, the Federal Funds target rate stood at 1.0%.
Instead of addressing the reason for its peculiar target range, the Federal Reserve opted for canned doomsday language that could have appeared verbatim in any of its previous rate cut announcements: It hasn’t…
17Dec2008 | Money Morning | 0 comments | ContinuedNegative rates on T-Bills
Treasuries rose, pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of U.S. government debt amid the worst financial crisis since the Great Depression.
The Treasury sold $27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The U.S. also sold $30 billion of four-week bills today at zero percent for the first time since it began selling the debt in 2001.
“It’s the year-end factor,” said Chris Ahrens, an interest-rate strategist in Greenwich, Connecticut, at UBS Securities LLC,…
10Dec2008 | The Real Deal | 0 comments | ContinuedRate cutting palooza
European Central Banks cut rates
The Bank of England’s Monetary Policy Committee voted to drop its key lending rate by a full percentage point to 2%. The bank last cut its benchmark rate to that level in 1939, where it stayed until it was hiked to 2.5% in 1951.
"In the United Kingdom, business surveys have weakened further and suggest that the downturn has gathered pace," the Monetary Policy Committee said in a statement announcing the move.
The European Central Bank’s Governing Council slashed its key lending rate by 75 basis points, or three-quarters of a percentage point, to 2.5%. The…
Dow Zooms Above 9,000 on Eve of Expected Fed Rate Cut
U.S. equities rallied yesterday (Tuesday) as the U.S. Federal Reserve convened for the first day of a two-day meeting of its monetary policy committee.
At the New York close, all three major U.S. indices had sizeable gains:
- The blue-chip Dow Jones Industrial Average Index soared 889.35 points, an increase of over 10%, to close at 9,065.12.
- The tech-laden Nasdaq Composite Index jumped 143.57 points, an increase of 9.5%, to reach 1,649.47.
- And the broader Standard & Poor’s 500 Index shot up 91.59 points, an increase of over 10%, to settle at 940.51.
“The valuations are extremely compelling right now,” Dan Veru, who helps manage about…
29Oct2008 | Money Morning | Comments Off | ContinuedRate cuts trigger inflation fears
Marketwatch
Moming Zohu
The Federal Reserve, European Central Bank and four other central banks lowered interest rates in a coordinated effort to combat world’s deepening financial turmoil.
"Coordinated central bank aggressive interest rate cuts should lead to gold surging in value in the coming months" as "currency devaluations look increasingly likely," said Mark O’Byrne, executive director at Gold and Silver Investments.
Gold for December delivery gained $24.50, or 2.8%, to close at $906.50 an ounce on the Comex division of the New York Mercantile Exchange. It was the first time the contract topped the $900 level since Sept. 29.
The metal has…
9Oct2008 | The Real Deal | Comments Off | ContinuedFed Holds Rate Steady in Face of Volatile Markets
Citing balanced threats from weak economic growth and inflation, the U.S. Federal Reserve yesterday (Tuesday) voted to hold the benchmark Federal Funds rate at 2.0%, despite a financial market that has been rocked in recent days by the continued fallout of the credit crisis.
“Downside risks to growth and the upside risk to inflation are both of significant concern,†the policymaking Federal Open Market Committee (FOMC) said in its statement yesterday. “The committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.â€
The FOMC statement openly acknowledged the many downside…
17Sep2008 | Money Morning | Comments Off | ContinuedFed Signals Next Move Will be a Hike in Rates, But Timing Remains Uncertain
The next move from the U.S. Federal Reserve will be to increase the Federal Funds rate, although the timing of that hike remains to be decided.
“A number of participants worried about the possibility that core inflation might fail to moderate next year unless the stance of monetary policy was tightened sooner than currently anticipated by financial markets,†according to the minutes of the Federal Open Market Committee’s Aug. 5 meeting released yesterday (Tuesday).
The FOMC voted to slash interest rates seven times from 5.25% last September, before voting to hold steady at the current 2.0% rate at the last two…
27Aug2008 | Money Morning | 1 comment | ContinuedEscalating Inflation at Home and Abroad Puts Pressure on Central Bankers
Inflation is spreading like wildfire around the globe, and while not every country is hurting as bad as Zimbabwe with its mind-boggling 2.2 million percent inflation, the United States and Europe are definitely still getting scorched by rising prices.
U.S. consumer prices, as measured by the Consumer Price Index (CPI), increased 1.1% in June, the Department of Labor reported yesterday (Wednesday). That brings the inflation rate for the past 12 months to 5%, well above the U.S. Federal Reserve’s preferred target of 2.0%.
The increase was higher than expected as a 6.6% jump in energy costs and a 0.8% rise in food…
17Jul2008 | Money Morning | Comments Off | Continued
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